Money Talk With Slater

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MONEY & SELF DISCIPLINE

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SELF-DISCIPLINE AND ITS RELATION TO MAKING MONEY

There is one thing that is common with billionaires, self-discipline. The ability to do what must be done. If they commit themselves to saving a certain amount of money every month, they do that no matter how they feel. They are able to sacrifice their personal wants like partying every weekend, to ensure that they achieve their objective.

Making money needs a high level of self-discipline. But don’t worry if you have low self-discipline, because it’s a skill you can develop by practice. They say it’s like a muscle the more you train, the more it grows, and everyone has a starting point. It does not matter how much you make, if you lack discipline with money you will always be living from one pay check to another, almost buried in debt and the accruing interest and with no savings.

So this is how to get disciplined with money

  1. Eliminate the object of temptation.

Always having available cash to spend, be it in credit cards or liquid cash, increases the chances of impulse buying. You will never be able to stick to your goals if you walk around with excess cash and you have low level of personal discipline.

Am not saying that cutting off expenses is the way to make money. But spending without a plan is a sure way of staying in debt. Everyday anticipate your expenses and just have enough to cover those expenses.

If you have low self-discipline avoid credit cards as much as you can. Avoid the situation of buy now pay later. This will enslave you to debt and credit card interest. You will always be living beyond your means thus spending a future income that you have not earned.

  1. Save first and spend the remainder.

One sure way of saving, is to ensure that you are paid net of your savings. That savings are deducted from your earnings automatically before you receive them. This will eliminate the chances of spending all your earnings in paying bills. There is a lot of will power needed in saving, unlike the temptation of indulging yourself in unplanned expenses.

Therefore pass the risk of making the decision to save to someone else. Let your employer automatically deduct and remit a part of your earning to your SACCO, or have a standing order with your bank to remit money to whatever mode of saving you have.

  1. Write down your goals and pursue one at a time

Someone one told me that “If you pen it, you will think it.” So write down your goals. What you want to achieve in the long run and short run. Strategize on how you are going to achieve these financial goals. As you know if you fail to plan, that is a good way of assuring yourself a fail.

Pursue one goal at a time. As pursuing many goals at the same time is draining, especially to people with low self-discipline. For example, if your goal is to get out of debt in two years’ time, increase your savings and increase investment. Start with discontinuing the many credit cards you have. You cannot quit drinking by drinking more. The same way you can’t get out of credit by borrowing more. With the reduced spending ability, you can focus on repaying the debts. After that you can think of increasing your savings. But you can’t achieve the two at the same time. That will overwhelm you. So pursue one goal at a time until you develop the muscle to tackle multiple goals at the same time.

  1. Think before you spend

If you want to gain that financial discipline and freedom, you have to think before you spend your hard earned cash. Estimate your future expenses and never over estimate your income. Before you spend ask yourself:

  • Can I do without this item of expenditure?
  • Am I buying this to make others happy, or because of outside pressure?
  • Is this item worth this much or can I get the same at a cheaper price?

This will make you cautious on what you are buying. Sometimes you can get an item at much lower price, in other not so prestigious shopping outlets. Always make sure you use your bargaining power. It will save you a couple of dollars that cumulatively is a lot in savings.

  1. Focus on your success not your failures

Definitely you will fail in achieving your plans more than once. That is life; it has a way of beating the hell out of us. The secret is in focusing on your success and moving on past your failures. You overspend today, that does not mean that the whole plan has failed. Dust yourself and move on. You only fail, when you don’t rise up and try again.

Remember I said that financial discipline is like a muscle. The more we train it the better we become in controlling our finances. Don’t be too hard on yourself. Celebrate your achievements and learn from your mistakes.

  1. Put up control systems

For company to succeed in cash control they rely on the strength of their internal control systems. Also an individual can put up control systems like budgets and weekly reviews to see where you are going wrong. You can use the envelope system, where you separate cash needed for every expense item in your budget. This will go a long way in ensuring that you don’t over spend in one area, and you don’t spend over your earnings.

Control systems ease your decision making. They help you in analyzing your financial activities and pointing where you are going wrong. Establish a system and stick with it.

The above ways to financial discipline are not the only but if you follow them, you will see that change that you desire in your finances. Am again not promising they will be easy to follow but the rewards are worth the effort. It’s not that billionaires were born billionaires, it’s how they spent their hard earned cash to improve their net worth.

BE YOUR OWN BOSS

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Benefits for working for yourself

There are always a lot of limitations when working for someone and you expect a pay at the end of the month or after the agreed period. In fact, you have sold your time to your employer, eight or whatever number of hours you are working for your employer, and all you can do is engage only in the activities laid out on your job description.

The pay is always not enough, as most of employers pay just enough to cover your opportunity cost. That is, they pay just enough for you not to change jobs keeping you away from greener pastures.  You may have observed that most of the employed are in two jobs or more, or have other side projects parallel to their nine to five jobs.

In fact generation Y no longer put up with an employer for more than 3 years. Unlike their parents who stayed with one employer for their entire adulthood, and their reward was climbing the corporate ladder and a handsome retirement package. Their chances of being wealthy were really slim.  But this is no longer the picture in our current economy.  The recession saw most employees laid off with nothing much to keep them afloat for more than two months. Most left with their mere savings. That’s when being an entrepreneur, or a freelancer, or a contractor became fashionable. I have listed down the advantages of working for yourself, but the list is longer. What I love most is that:

  1. It’s really rewarding

Nothing is more rewarding than getting paid for work well done. Being sure that the better the quality or the more the input the greater the output. Unlike when working for someone, where rewards are not related to your input but to the contract you signed. The best your employer can do after working hard and achieving beyond average, is give you a good recommendation or good performance in job appraisal.  Here your hard work and burning of mid-night candle is rewarded by increased cash flow and recognition in your industry. There is a direct relationship between your hard work and success

  1. Flexibility of working hours

Being self-employed you have a chance to decide when to work. If you prefer early morning hours you can work from 4.00 am to 10.00 am and decide to indulge in other activities the others hours. No one dictates when to clock in and when to leave the office. The only control you have is that which you set for yourself and what the client wants. If you sleep late at night and spend your afternoons basking in the sun, no one cares. With this kind of system you can work when you are best motivated to. You can easily plan your schedule and accommodate all important stuff in the 24hrs that you have in one given day.

  1. Ability to run multiple projects at the same time

For there is no fixed working hours, self-employment gives you the ability to work on more than one project at a time. You can wake up early in the morning and deal with one project. At mid-day go supervise another project and in the afternoon go back to your office and do another task and still allocate time to go to your son football game. The backlog will be compensated by working late at night.

That’s the reason freelancers are able to make a lot with the same 24 hrs as employed masses. When they learn the art of delegating and using their time to the maximum. Their time is always occupied by multiple projects and they are never dull. Unlike in employment where your activities are dictated by your job description and relationship with your supervisor.

  1. A character builder

Self-employment comes with a lot of challenges. Before a small business becomes stable, you have to deal with bad debts, build customer confidence in your brand, and experience negative cash flows amidst other challenges. This makes you learn to be disciplined, plan your expenditure, be patient and sharpen you people skills. Also the requirement that you wear many hats, that is, be a marketer, debt collector, accountant and secretary of your business makes you an all-round person.

My friend started an IT firm and it made him read a lot of books on how to run a business, labour rules and regulations, be attentive on tax matters and a lot of other things. Even if his business collapsed within three years, he is not the same guy he was when he started that business. He now has more respect for all small business owners. He is street smart and has more avenues of making money than before. He has developed a thick skin for risk and has more avenues for raising capital.

He learnt more about himself than he ever learned while in employment. All the experience he got while trying to put one foot in front of the other, made him learn what he is good in and what he is pathetic in. He learned what he can do with his free time and above all what he is worth. Now if he falls back into employment he clearly understand his opportunity cost. That is, the highest he can make on his own, is the lowest he can agree to be paid in employment.

  1. Job security

With competition increasing every day, job security is an illusion to those who are employed. You can be working in a big corporation and you are good in what you do. All of a sudden a you recent graduate comes with a better way of doing your job. Or your boss messes up with the company financials and within two months the company is bankrupt.

That gives you another reason to start up you own enterprise. The market forces will always keep you on your toes. If you keep up with the change, you will always have a client.  The more you are on your own, the more goodwill you generate and the better job security you have.  Referrals from clients you impressed will always be coming in, and nothing can beat that in terms of job security. All it requires is you being good at what you do and keep up with the changes in the industry.

  1. Freedom

I woke up on a Monday morning with a terrible tooth ache and I called my supervisor to inform him that I couldn’t make it. To my surprise, my supervisor demanded that I check in before midday and with evidence from the doctor that I was treated. That was all I needed to start up my own side job. It dawned on me that I had no freedom to do as I please. I existed just to serve my master, and nothing mattered apart from my master’s needs.

Now I have a family, and I can’t imagine asking for permission to attend a special event or even take my daughter to the doctor. All I do now is delegate my duties and go be with my family, or wake up early and attend to my pressing duties, and join my family later when they need me. This is a pack that you can only enjoy when self-employed.

HABITS THAT CAN HELP INCREASE YOUR WEALTH

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HABITS THAT CAN HELP INCREASE YOUR WEALTH

It’s not just a coincidence that the wealthy share more than one habit. Our habits determine our success in all areas of life. Let me first explain what a habit is and then correlate with making money and building your wealth.

According to Wikipedia,

“A habit is a routine of behavior that is repeated regularly and tends to occur unconsciously. What defines us is what we do over and over again.”

For example if we abuse drugs over and over we become drug addicts. Also if we train on a particular skill we become experts in that field. All successful athletes have a set of skills that they train on. So it is the same on making wealth. There is a set of habits, that successful wealthy individuals have and I will discuss them as follows:

  1. Appreciate the value of time

The old time mantra that time is money, has truth in it. Time is a resource and therefore it is limited. Wasting time with activities that add no value will not make you wealthy. You cannot waste your time in social media, going over your friend’s photos and commenting on how awesome they look and add a dime in your account.

Develop up a habit of waking up early and engage in activities that have a potential of making a difference. Most successful people wake up early and plan their day. They need that extra minute to be able to accommodate their a thousand and one activities. You can never be late for appointments and, or entertain others who are late for their appointments with you. Make people understand that you value your time by respecting their time. If you accumulate the time you spend on waiting for others to show up, its time you would have indulged in earning a dollar, or reading important materials.

  1. Accumulating knowledge

The rich have another common trait. They read a lot, not really for pleasure but mainly in their areas of interest. If they want to invest in a certain industry or project, the read all they can in that area. Unlike the poor who spend their time watching TV and other form of entertainment.

Some of my personal favorites are Grant Cardone, Anthony Robbins, Zig Ziglar, and Napoleon Hill. These guys are real masters in their fields and have motivated millions over the years!

Read on self-improvement, how effectively to run your life and achieve more with the limited resources.  Apart from having an active brain, reading improves your confidence in your area of study. Knowledge is something that will come in handy in decision making. It will also enable you in relating with other professionals or experts in your field.

Therefore develop a habit of reading in your area of interest. This is time well spent. You are able to learn from other people experiences and also avoid the mistakes others have done, in pursuit of excellence.

  1. Goal setting and planning

If all corporations worth their salt have five years plan, current year plans and budgets, why do you think you can do anything without a plan? For you to have a sense of direction, focus and control, you need a plan. Without a plan, your mind is easily tossed around every thought that you think will make you money. Develop strategies to attain your goals.

Make a habit of reviewing your goals after a certain period. Make a to do list every day and review at the end of the day how much you have achieved, why didn’t you achieve and how you will achieve more in the future.

Don’t just approach a day without knowing what you want to achieve at the end of the day. This will make you accept anything that comes your way; all results to you are satisfactory. Rather approach your day with a purpose and you will find a reason to say no to certain activities that derail you from your goals.

  1. Learn to say no

Most of the time it is required of us to help our loved ones achieve their goals. But this should not be at the expense of not achieving ours’. Remember all activities take up our time, and if they are not in alignment with our goals and objectives we should say no.

But saying no, it makes us seem selfish and uncaring. It’s not as easy as said. It takes a lot of discipline to say no. But this will save you a lot of stress and most of the time saves you a relationship. Remember time is limited and also time is money. So if you cannot fit someone’s request in your schedule just say no. Or else you will find yourself in a tricky position if you fail to do so.

Remember each and every time you agree to someone’s request you deny yourself or someone else something. It’s a trade; mind the cost of accommodating each and every person request. It will leave you with no time of focusing on your own goals.

Learning to say no is a matter of setting boundaries. Am not suggesting that you say no to every request, but never say yes when you know that you not able to accomplish that request, without suffering a huge blow on your plans.

  1. Taking risks

Taking risks is all about exit from your comfortable zone. It becomes easier every time you ditch your comfort zone and risk your resources. No matter how little the gain is, this will certainly boost confidence, don’t you agree? Most of professionals in their forties wish they would have trod the less traveled route in their careers.

Our brains are wired to overestimate worst scenarios. This is a protective mechanism that ensures our status quo is not harmed. But successful people are always risking their status quo to attain a better life.

Taking calculated risks every time improves their average chance of success. That is, if one project fails and twenty others are successful, on average his success will outweigh his failures. Most of us are endowed with great talents and abilities but we fear quitting what we do to engage our talents and abilities. We choose to stay with our current employers and comfortably earn a pay check other than engage our entrepreneurial spirt.

What makes life interesting is moving from our comfortable zone and trying out something different. It not only enriches our life experiences but sharpens our skills, abilities and confidence.